Corporate demand for genuine payments pushed the rupee-dollar parity rates down in the currency market last week, currency experts said.
In the inter-bank market, the rupee shed five paisa in relation to dollar for buying and selling at Rs 57.85 and Rs 57.87.
Same trend was witnessed in the open market as it lost 15 paisa versus the greenback for buying and selling at Rs 58.40 and Rs 58.45. It, however, gained Rs 1.45 versus the euro for buying and selling at Rs 70.05 and Rs 70.35.
Dollar supply was short as banks were leading buyers due to payment requirements before June 30, they said. People were expecting no new taxes in the 2004-05 budget.
Rising trend in oil prices in the global markets made the payments high, which caused short supply of dollars, experts said. They said that the government needs money for payments, so the banks are buying dollars from the open market to fulfil the requirements.
In order to keep inflation below 4.2 percent, there were expectations of an increase in interest rate in the coming days, a report said.
The State Bank of Pakistan is determined to keep the rate below the level, experts said. They observed that the rupee would move purely on demand of market forces.
OPEN MARKET RATES: On Monday, the rupee maintained its weekend rising trend versus dollar, gaining five paisa for buying and selling at Rs 58.25 and Rs 58.35, respectively.
Versus the euro, the local currency maintained its weekend levels for buying and selling at Rs 71.50 and Rs 71.80, dealers said.
On Tuesday, the rupee managed to hold its overnight levels against the dollar, picking up five paisa for buying at Rs 58.20 and 10 paisa for selling at Rs 58.25, dealers said.
The rupee shed five paisa versus the euro for buying and selling at Rs 71.55 and Rs 71.85.
On Wednesday, the rupee-dollar parity rates drifted lower, losing five paisa for buying and selling at Rs 58.25 and Rs 58.30.
In the meantime, profit-taking was again witnessed the euro trade as the rupee managed to recover 55 paisa gain versus the euro for buying and selling at Rs 71.00 and Rs 71.30.
On Thursday the rupee extended its fall versus the dollar, losing 10 paisa in a single day slide for buying and selling at Rs 58.35 and Rs 58.45, respectively.
The rupee, however, gained 60 paisa in relation to the euro for buying and selling at Rs 70.40 and Rs 70.70, dealers said.
On Friday, the rupee picked up 10 paisa for buying and selling at Rs 58.35 and Rs 58.40, respectively.
The local currency also jumped versus the euro for buying and selling at Rs 69.85 and Rs 70.15 as a result of dollar's appreciation in the international markets, currency experts said.
On Saturday, the rupee lost five paisa versus the dollar for buying and selling at Rs 58.40 and Rs 58.45. The euro was quoted at Rs 70.05 and Rs 70.35.
INTER-BANK RATES: On June 7, the rupee shed two paisa versus the dollar for buying and selling at Rs 57.80 and Rs 57.82 on corporate sector demand, market men said.
On June 8, the rupee lost two paisa for buying and selling at Rs 57.82 and Rs 57.85. On June 9, the rupee gained three paisa in relation to the greenback on the buying and selling counters at Rs 57.79 and Rs 57.81, respectively.
On June 10, the rupee gave up its overnight firmness, shedding two paisa versus dollar for buying and selling at Rs 57.81 and Rs 57.83 as banks made hectic buying of dollars due to oil payments, dealers said.
On June 11, the rupee continued its overnight weakness versus dollar in the inter-bank market, losing two paisa more for buying and selling at Rs 57.83 and Rs 57.85, market men said.
Huge payments before the end of fiscal year dragged the rupee value down and the present trend might continue in the near terms, they added. On June 12, the rupee showed a loss of two paisa further for buying and selling at Rs 57.85 and Rs 57.87.
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